Salem Business Journal

Published Mar. 5th, 2024
Written by Naomi Yanike


Merging two of Oregon’s largest property management companies “doesn’t happen by waving a magic wand.” President and CEO of SMI Property Management Gabe Johansen described the reality of the process, saying, “It’s a lot of work. It’s a painful process. And It’s not easy.”

Johansen felt honored when JPM Real Estate Services’ Founder, Jack Palmer, chose SMI to carry on JPM’s 20-year legacy marked by personalized client service. Palmer liked Johansen’s enthusiasm, recalling their first casual meeting at SMI to discuss the possibility of a merger. “We hit it off so well. We have similar values, such as respect for employees and excitement about growth, particularly in the Portland metro area,” he said.

Palmer shared that his main merger concern was that JPM’s employees would be taken care of and that his company would carry on and continue to grow. “I believe Gabe is the best person to handle that,” he said. And Johansen was equally thrilled to add JPM’s 60 relationship-focused professionals to the SMI team.

SMI’s services now go beyond Salem and the Willamette Valley to the greater Portland area, continuing its 48-year history of providing a full range of management services to property owners – tenant placement, property inspections, regular property maintenance, 24-hour emergency services, rent collection, marketing of vacancies, and financial reporting.

Lessons from Their Merger

Johansen said the official February 2024 merger went together smoothly and seamlessly because the cultural values of both companies are closely aligned. Palmer and Johansen also went through a preliminary one-year process ahead of the merger to prepare for the challenges and create a strong plan for bringing the companies together.

“I have 40 years of old-school hands-on experience, and Gabe has innovative knowledge and resources. This combination will translate to an exceptional quality of management, maintenance, and client care,” said Palmer. “I think this merger will bring a better quality of multifamily property management, which translates to a better quality of living, specifically for tenants in the mid-valley area.”

Their one-year merger preparation process included an in-depth look at the intricate nuances of each business, taking the best of both SMI and JPM and putting them together. One surprise was that neither company did things better or worse – just different.

“In a perfect world, you would get to maintain the best things from both companies,” Johansen said. “But merging companies involves a lot of re-learning and starting over to avoid running two different companies under one roof.”

Johansen said mergers are a challenging but great way to grow your company, especially if you want to merge with a company with something to offer in different areas. And at the end of their first month as a merger, he said, “Things get better each day.”

Keeping Their Investment Local

Large national companies pursued the purchasing of both JPM and SMI. Johansen said Salem, the Willamette Valley, and Portland have been the communities at the heart of why his predecessors turned those companies down. “Neither SMI nor JPM wanted to sell to a large national outfit. They wanted to keep business close to home as a small family business,” he said. “Even though we now have 200 people, it makes us feel like a small family.”

Johansen said SMI strives to be an employee-first company.

“We feel that if we put our employees first, they will do a great job taking care of our customers – both tenants and owners. In turn, we will do better and more business,” Johansen said. “That’s our culture, how we see things, and how we run our business. That’s what caught Jack’s attention.”

The merger was the answer to the barrier his company faced with needing help to attract new talent in Portland, even though they have been able to find new property management opportunities. Now, SMI’s nearly 200 employees are a mix of highly trained portfolio managers, apartment community managers, and skilled maintenance teams.

“The value of this merger is in the people. Even if property owners decide not to make the transition, the employees are critical in continuing to go forward,” he said.

Johansen isn’t sure how long the days of locally owned and operated management companies will be around, citing that many management companies are built on online web services, serve all 50 states, and everything changes because of technology. That’s why SMI has decided to prioritize first-class levels of client care.

“As an owner, I don’t want to deal with an online national company. I want to deal with local people that I can sit and talk with and walk my properties with,” he said. Palmer added the priority to “Keep communication with clients open. And don’t be afraid to tell them the good, the bad, and the ugly.”

The merger brings a unique opportunity for SMI to expand its services to tenants, owners, and employees. It will add 2,100 units to its management portfolio, bringing its total to nearly 5,400 multifamily units from Corvallis and Albany through Salem and Keizer up to Portland, Tigard, Beaverton, Gladstone, Canby, and communities in between. SMI also manages approximately 50 commercial office and retail properties in the mid-Willamette Valley.

People First and Leaving Legacies

Stewarding 5,400 units and being one of the larger property management companies in Oregon is how SMI will grow wide in its strategy. Still, Johansen said SMI will grow in depth with the JPM people. Palmer said a lesson he lives by is, “Regardless of how big your company is, your employees are the backbone of your company. Take care of your employees. Growth needs to happen internally before it can happen externally.”

Johansen bought SMI three years ago, making him relatively new to the management game, but he has now bought two of the largest management companies in the region. His experiences on the brokerage side of the industry and apartment complexes bring him onto the property management scene.

“I know how to manage from an owner’s perspective. And I know what clients are uniquely looking for because I am an owner,” he said. “Our management companies are our legacies. But we’re also caring for the legacies of many families and the properties that they own. For a lot of them, this is also their retirement.”

Johansen considers the weight and responsibility of SMI and JPM having trusted someone to continue to grow their legacies and protect the reputations they established as they proceed to retirement.

“Both companies selected me to take these great companies into the next era. And I hope to take what they’ve built, put them together, and grow it into something beautiful, hopefully for my legacy,” he said.

Palmer will stay on as a consultant for SMI over the next year and will be available after that if they need anything. He plans to travel, spend time with his family, go to games, and work on his bucket list.

“I’ve had a diverse and fulfilling career and learned much about construction, marketing, real estate laws, asset management, tenant retention, property management, and more. No two days are the same. I’ve met wonderful people and feel like I accomplished my goals,” he said. “The thing I cherish the most is that I will walk away with valued relationships with employees, clients, and vendors.”

— Naomi Yanike